May 29 (Bloomberg) -- AT&T Inc. Chairman Randall
Stephenson lost $2.08 million in bonus pay after Democrats
killed his bid to build the biggest mobile provider. Six weeks
after the deal collapsed, he made his largest campaign donation
in more than two decades of giving to Republicans.

Stephenson’s $30,800 contribution to the Republican
National Committee punctuated months of sniping between the
biggest U.S. telephone company and the Democratic-controlled
Federal Communications Commission.

“There’s still a lot of ill will from the T-Mobile deal,”
Christopher King, a Baltimore-based analyst with Stifel Nicolaus
& Co., said in an interview. “The risk is you tick off
regulators and they don’t like to see themselves trashed every
time they turned around. They have to be careful in terms of
going too far.”

For Stephenson, the merger’s demise Dec. 19 had personal
and business effects.

His short- and long-term bonuses were reduced due to the
failed takeover, according to a Feb. 21 AT&T filing that also
said the transaction “reinforced the need for policymakers to
make essential spectrum available” to relieve pressure from
soaring smartphone demand.

AT&T Donations

Stephenson made his $30,800 donation, the legal maximum, on
Feb. 6, according to the Center for Responsive Politics, a
Washington-based research group that tracks campaign donations.
The Republican committee is trying to defeat President Barack
Obama, a Democrat, in the November U.S. election.

Stephenson’s largest previous donation in records back to
1990 was $5,000, according to the center.

AT&T doesn’t comment on personal political contributions,
Brad Burns, an AT&T spokesman, said in an e-mail.

Stephenson is “disappointed by the actions of the FCC, and
he’s letting them know it,” Roger Entner, an analyst with Recon
Analytics in Dedham, Massachusetts, said in an interview.

Sixty-five percent of donations from AT&T employees and
their families are going to Republicans for the 2012 elections,
according to the Center for Responsive Politics. That’s up from
55 percent in 2010, when the Democrats were in charge of both
houses of Congress and the presidency, and is the highest
percentage since the center began keeping records in 1990.

Republicans got 63 percent of the AT&T donations when they
controlled the White House and Congress in 2006.

The heads of Verizon Communications Inc. and Sprint Nextel
Corp., Lowell McAdam and Dan Hesse, respectively, gave no money
to national political parties in the last year, records show.

Price Increases

Stephenson, 52, trained as an accountant, has been chief of
AT&T since 2007. He reached the post after 23 years mainly in
financial positions with SBC Communications, which purchased
AT&T in 2005.

The failed T-Mobile deal was a rare defeat on his watch
after AT&T had spent the past 16 years amassing $204.3 billion
in acquisitions. Its demise after FCC opposition and a Justice
Department lawsuit, on the basis it would reduce wireless
competition and raise prices, cost AT&T $4 billion in fees and
airwaves given to T-Mobile’s parent, Bonn-based Deutsche Telekom
AG.

AT&T raised prices for some data plans in January, and
Stephenson before and after the increase said the merger’s
failure would bring higher prices for consumers.

Genachowski Hits Back

Genachowski in a May 8 speech rejected the link and said
the agency under his leadership has approved “hundreds” of
wireless transactions. Stephenson two days later repeated to
Bloomberg News reporters his criticism that the agency is slow
to free airwaves for commercial use.

“We wouldn’t expect any single stakeholder to agree with
us on everything,” Genachowski said during a press conference
May 24 when asked about AT&T. “I think the relationships are
good.

AT&T has areas of agreement and disagreement with the FCC,
said Jim Cicconi, the company’s top Washington executive.

“There are always some in Washington who try to over-dramatize any policy dispute,” Cicconi said in an e-mail. “All
agreements and disagreements are on public display at any given
time. There is nothing unusual in that.”

‘Obviously One-Sided’

AT&T on its policy blog Dec. 1 called the FCC’s analysis of
the T-Mobile deal “obviously one-sided.” In an earnings call
with investors Jan. 26, Stephenson called spectrum availability
the most important issue for his company’s future.

“Unfortunately even the smallest and most routine spectrum
deals are receiving intense scrutiny from this FCC,” he said.

News of T-Mobile closing seven call centers was greeted
with a March 23 posting holding the government responsible.

“The price of a bad decision is too often paid by someone
else,” Cicconi, senior executive vice president of external and
legislative affairs, said in the posting.

AT&T’s own internal documents had forecast job losses from
the merger, Neil Grace, an FCC spokesman, said in an e-mail that
day. He declined to comment for this story.

The company has commended the FCC for encouraging flexible
pricing for high-speed Internet service, and for examining ways
to convert satellite airwaves to mobile data use.

‘Punching Bag’

Criticism aside, AT&T needs the FCC on its side, as it must
get commission approval of airwaves purchases. Stephenson on the
Jan. 26 call said the company will seek smaller deals.

AT&T also wants to keep the FCC from restricting its
participation in airwave auctions, said Gigi Sohn, president of
Public Knowledge, a Washington-based policy group.

AT&T is “using the FCC as a punching bag and softening
them up for when the next big issue comes up -- which is who
gets what spectrum,” Sohn, who opposed the merger, said in an
interview.

The FCC under Genachowski has declined to declare that the
U.S. wireless market is competitive, and it said Philip
Falcone’s LightSquared Inc., which filed for bankruptcy
protection May 14, needs agency permission to sell its airwaves
to the top two wireless carriers.

Those stances, and limitations placed on past auctions,
lead AT&T to believe it may face barriers to obtaining more
airwaves, Bob Quinn, AT&T senior vice president-federal
regulatory and chief privacy officer, said in a Jan. 12 blog
post.

Dallas-based AT&T may think it doesn’t have much more to
lose by continuing its criticism, Entner said. He said the phone
company in December distributed cupcakes to contacts in
Washington including FCC officials.

“AT&T tried to make nice,” Entner said. “They even gave
them cupcakes and that didn’t work.”